Suppose 8 = 1/3. Before the game starts, you tell the players that you will offer...

 

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Suppose 8 = 1/3. Before the game starts, you tell the players that you will offer each of them money m > 0 at each period both of them cooperate. The new per period payoff matrix is as follows: D -5,5 2+m, 2+m 5, -5 0, 0 At least how much should you offer to make the strategy described in part 7 a SPNE? C D For this question consider the following extended Prisoner's Dilemma with additional pun- ishment strategy (P). C D C 2,2 D 5,-5 P -5,5 0,0 0,0 0,0 P 0,0 0,0 -8,-8 Let both players adopt the following strategy: start with cooperation; cooperate if both play- ers cooperated or both players played punishments strategy in the previous period; punish if (1) one player defected and the other player cooperated in the previous period or (2) if one player played punishment and the other one did not. In other words, the punishment for deviating from cooperation or punishment only lasts for one period, and both players revert to cooperation immediately after. What is the condition on d for this strategy profile to be a SPNE? Suppose 8 = 1/3. Before the game starts, you tell the players that you will offer each of them money m > 0 at each period both of them cooperate. The new per period payoff matrix is as follows: D -5,5 2+m, 2+m 5, -5 0, 0 At least how much should you offer to make the strategy described in part 7 a SPNE? C D For this question consider the following extended Prisoner's Dilemma with additional pun- ishment strategy (P). C D C 2,2 D 5,-5 P -5,5 0,0 0,0 0,0 P 0,0 0,0 -8,-8 Let both players adopt the following strategy: start with cooperation; cooperate if both play- ers cooperated or both players played punishments strategy in the previous period; punish if (1) one player defected and the other player cooperated in the previous period or (2) if one player played punishment and the other one did not. In other words, the punishment for deviating from cooperation or punishment only lasts for one period, and both players revert to cooperation immediately after. What is the condition on d for this strategy profile to be a SPNE?

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